International Business News – According to the latest report released by the Philippine National Bureau of Statistics recently, the Philippines’ second-quarter gross domestic product grew by 7.4% year-on-year, making it “one of the fastest-growing Asian economies in the quarter.”
Sectors such as construction, transportation and warehousing were the main contributors to the Philippines’ economic growth in the second quarter, while agriculture, forestry, fisheries and services also posted positive growth, the report said. At present, the Philippines is promoting a number of reforms in taxation, finance, land and investment to reduce poverty rates and raise per capita income levels, striving to achieve economic growth of 6.5% to 7.5% this year.
Arsenio Barisacan, Secretary of the Department of Socio-Economic Planning of the Philippines, said that the rise in commodity and energy prices caused the Philippines’ economic growth rate to drop slightly in the second quarter, but the overall economic recovery momentum is obvious, and the Philippine government is confident to achieve full-year economic growth Target.
A major push for infrastructure development is an important measure for the new Philippine government to stimulate economic recovery. Philippine President Ferdinand Marcos has repeatedly said during his election campaign and since taking office that he will continue the “build it big” plan proposed by former President Rodrigo Duterte and maintain infrastructure spending at 5% of GDP. Philippine Finance Secretary Benjamin Diokno said the government will expand energy supplies such as electricity and natural gas and provide financial assistance to struggling businesses to accelerate infrastructure construction and investment.
To attract more foreign investment, the Philippines will continue to improve the business environment. The Philippine Department of Finance is working on drafting the Business Recovery and Corporate Tax Incentives Act, amending the Public Service Act, the Retail Trade Liberalization Act and the Foreign Investment Act, which will be submitted to Congress for consideration as soon as possible.
The Philippines has also identified the cultural and creative industries as a major driver of economic recovery. Prior to the epidemic, the industry provided employment for 4.8 million Filipinos and occupied an important place in the Philippine economy. Philippine Trade and Industry Secretary Basquiat said the epidemic caused the Philippine cultural and creative industry to lose 90 percent of its revenue and about 61 percent of arts and entertainment companies suspended operations, but with government measures, the cultural and creative industry is bottoming out and playing an important role in the economic recovery. In May, the Philippine House of Representatives approved the Philippine Creative Industries Development Act, and the Philippine Department of Trade and Industry continues to promote the “Creative Economy Strategy” to improve the competitiveness of the cultural and creative industries and support the industry’s digital advertising, animation, game development, media and other related companies to enter the global market. Basquiat said that the Philippines aims to become the largest cultural and creative economy in Southeast Asia by 2030.
Tourism is picking up momentum as domestic vaccination rates in the Philippines continue to increase and the government is gradually restoring foreign tourist arrivals. A report released recently by the Philippine Tourism Office in Malay City, Aklan Province, shows that a large number of foreign tourists are flocking to Boracay, a famous local attraction. Aklan Rep. Hariscoe said Boracay is the barometer of the Philippine tourism industry, and that the recovery of tourism will provide more jobs for the Philippines and drive the country’s economic recovery.
While promoting economic growth, the Philippines is also facing the challenge of inflation. In June this year, inflation in the Philippines reached 6.1%, the highest level since October 2018. To ease inflationary pressures, the Philippine central bank announced a 75 basis point interest rate hike not long ago. BSP Governor Medara said that price pressures continue to expand while monetary policy is gradually normalizing, and the government will work to maintain price stability and ensure a solid economic recovery.